American Experiment (189 page)

“There are all ladies in this room,” she added, “and therefore they do as they choose, most of them bring dressing sacques and put them on to work in. Some even take off their corsets. You know Mama
never
wears any at home, perhaps she may be able to do all this in the Land Office.”

The White House in the mid-eighties was still a place where a job seeker could walk through the front door without being questioned, cross the big vestibule, climb a flight of winding stairs, present his card to a secretary,
and expect to see the President. Lobbyists, cranks, deadbeats, pension lawyers, sightseers swarmed through the House of Representatives and crowded around the chamber itself, where members, their feet propped up on their desks and their pink-and-gold cuspidors at their side, conducted genial business in tobacco smoke so thick that ladies grew ill in the galleries above. Only a few elder senators took snuff, but they could still drink, even in the Capitol restaurant, where an order for tea, combined with a wink to the waiter, would produce a cup half filled with whiskey. Pennsylvania Avenue still connected—and separated—President and Congress. For years it was separated itself, by railroad tracks that cut across the Mall between the Capitol and the Treasury. Congress, which controlled the city government, time and again tried to compel the Pennsylvania Railroad to eliminate these grade crossings, without success. It seemed to Washington’s leading historian that the railroad controlled the public domain in the very heart of the nation’s capital.

What then did these legislators
do?
The most visible continuing struggle in the post-Civil War years was over the tariff, though this struggle more often resembled a giant game of kick-the-ball in which bands of players, now teaming with one group and then another, kicked a number of balls over a variety of goalposts, while the spectators tried vainly to keep score. Despite thunderous declarations in party platforms, there were no clear divisions between Democrats and Republicans over actual policy. Rather, the tariff was thrown into an arena of contending interests. Of foreign-policy interests: the need of western farmers for overseas markets and the national interest in friendly relations abroad, balanced against workers’ fears of “pauper” competition, and such ethnic factors as Irish hatred of English “imperialists.” Of regional interests: in general North versus South, save for contrary interests within each section; thus Louisiana sugar growers favored a protective tariff. Of economic interests: broadly, producers versus consumers, but many workers acted on the basis of their concrete palpable stake in a particular industry rather than their thin general interest as consumers and on balance favored protection, while some manufacturers and many merchants opposed it. Of ideological or intellectual divisions: protection seemed to challenge some of the hoariest ideas in the American pantheon—notably individual economic liberty, laissez-faire government, decentralization—but the power of protectionist interests easily overrode such ideas, in part because the ideas were ambiguous and ambivalent. Editorial lions roared: such organs as the New York
Evening Post
and the Louisville
Courier-Journal
favored lower tariffs; many others, like the Philadelphia
Press
and the New York
Tribune,
championed protection.

Amid the clash of rhetoric and the dust of battle the politicos of House and Senate calculated these contending interests almost with the accuracy of an apothecary’s scale. This was what they were good at. The result was a series of compromises, now skewed in certain directions, now in others, as senators, congressmen, and Presidents came and went. Both parties, according to Tom Terrill, promised “prosperity and social harmony without fundamentally altering the nation politically or economically.” The result was a series of “mongrel tariffs.”

Some expected that Grover Cleveland would upset this equipoise following his presidential victory in 1884 on top of sweeping Democratic gains in Congress two years before. On the argument that “it is a
condition
which confronts us—not a theory,” he demanded sweeping tariff reduction. But Cleveland faced a
political
condition—the fact that a band of Democratic congressmen had persistently opposed major tariff reduction. The President finally managed to corral almost all the House Democrats, but the measure ran afoul of the Republican majority in the Senate, the presidential race of 1888, and Benjamin Harrison’s victory. This issue too would be projected into the turbulent nineties.

Struggles over silver and gold also aroused great sound and fury, usually signifying little more than a free-for-all among a jumble of interests. After 1873, when Congress demonetized silver and left gold as the sole monetary standard, silverites began to denounce this “crime of ’73” as a gold conspiracy. Five years later agrarians opposed to deflation combined with silverites to pass over Hayes’s veto the Bland-Allison Act, which required the Secretary of the Treasury every month to buy between $2 million and $4 million worth of silver at the market price. In 1890, the Sherman Silver Purchase Act raised the purchase to 4.5 million ounces per month and authorized the Treasury to issue in payment legal tender Treasury notes redeemable in gold or silver by Treasury decision, but it did not provide for free silver.

The rhetoric seemed to reflect a titanic struggle between rich and poor, easterner and westerner, upper class and lower class, debtor and creditor, farmer and financier, or some combination thereof. But the currency issue was not clear and sharp enough—or presented clearly or sharply enough—to pit mammoth interests against one another. Rather, the groups were divided among themselves—manufacturing interests against financial interests, big farmers against tenant farmers, hard-money businessmen against soft-money businessmen, New England textile interests against Pennsylvania iron and steel.

It was the job of party leaders to disentangle these webs of interests and to seek popular majorities for group coalitions, but for some years after
the Civil War the crosscutting forces were too hard to master. Instead of grand electoral battles, with clear winners and losers in the congressional struggle over policy, currency battles dissolved into numberless obscure skirmishes, and policy into weak compromises and even vacuity. A government of “intricate partisan maneuver and token legislation,” in Robert Wiebe’s words, “elevated certain types of leadership,” but the “apparent leaders were as much adrift as their followers. For lack of anything that made better sense of their world, people everywhere weighed, counted, and measured it.” What kind of force was necessary to reshape parties, interests, coalitions, and leadership in a way that would make possible a transcending conflict between moral principles, grand policy, clearly polarized leaderships?

Certainly the railroad issue would not polarize party politicians, even though this issue sharpened in the seventies as farmers, workers, merchants, shippers, in varied ways and for varied reasons, attacked railroad monopolies, rate-making rebates and other discriminatory practices, corruption, and employment policies. By 1884, both national parties endorsed federal regulation. So did even a number of railroad men themselves, though most, including the likes of Jay Gould, opposed such governmental “interference.” Having accepted huge public grants and subsidies from the start, railroad men could hardly escape the regulation that this would entail. Some railroad leaders welcomed moderate federal regulation in order to stave off “extremist” state controls. Their own efforts at self-policing—through rate agreements, pools, arbitration, and other forms of “cooperation”—had failed to work out practically and had aroused public hostility to boot.

Such a consensus for railroad regulation had developed by the 1880s that the House of Representatives, under the leadership of a Texas congressman expert in railroad transportation, John H. Reagan, was strongly supporting federal regulation. The national consensus for regulation had such frail and mixed foundations, however, as to diffuse the policy-making process itself. The Senate and House passed bills so diverse as to tie the measures up in conference committee for months. The outcome in 1887, the Interstate Commerce Act, was a compromise measure that did not set freight and passenger tariffs and was vague in key aspects, but it did prohibit the granting of rebates, higher rates for shorter distances over the same line, and pooling agreements, and it established a five-man commission to monitor the railroads and enforce the law through prosecutions in the federal courts.

The Interstate Commerce Commission itself soon fell victim to the diffusion of political and governmental power. Enjoying solid support
neither in the government nor at the grass roots, it felt the shifting pressures of the various interests involved. The result was feeble enforcement of the law, considerable evasion of it, and a series of Supreme Court decisions that weakened federal regulation to the point of emasculation.

If federal regulation of railroads faltered, what about action by the states? Long before the Civil War the first efforts had indeed begun at this level, in the form of commissions that investigated and publicized conditions and later of state bodies that actually set maximum rates and prohibited exorbitant charges. But these bodies ran into the same difficulties that had long plagued state control of big enterprises: the impotence or incompetence of many railroad commissions, pro-railroad court decisions, the persuasiveness of railroad lobbyists clustered in state capitals, and above all the power of great railroad corporations operating across state lines combined with the competition of states and localities for railroad service. By century’s end, in Morton Keller’s summation, neither state nor federal supervision had “resolved the conflicts raised by the interplay of railroads, shippers, labor, and the public.”

Some states, indeed, were arenas for railroad extravaganzas rather than regulation. California was perhaps the extreme case. Having conquered the Sierras, the Big Four—the big burly Stanford as politician-in-chief, the big burly Crocker as chief of construction, the big burly Huntington as chief financier and lobbyist, and the tall, thin Mark Hopkins as chief administrator—plunged into a twenty-year battle for economic and political power in the state. They propagandized in newspaper ads and in speeches to their employees, bought out opposition papers, handed out free railroad passes, lobbied and probably paid off legislators. These men were not hypocrites. “It is a question of might,” Stanford told his stockholders, “and it is to your interest to have it determined where the power resides.”

The Big Four confronted economic rivals as well as political assailants. Stanford and Huntington had to fight off railroad invasions from the east, “taking possession,” Stewart Holbrook said, “of all the mountain passes.” The Big Four were able to buy out or otherwise overcome a number of small railroad ventures on the West Coast, but they met their match in Thomas Scott, a veteran railroader who had first learned his trade with the famous Allegheny Portage Railroad and later as the man who advised President-elect Lincoln to proceed secretly from Harrisburg to Washington. Now president of the powerful Pennsylvania Railroad and of the Texas & Pacific, Scott speared his rail lines through the Southwest, but encountered stout resistance from the Big Four’s Southern Pacific.

Huntington counterattacked his rivals in Congress and state legislatures as well as in the mountain passes. His comments and instructions to his
agent minced few words: “I believe with $200,000 I can pass our bill.” “I do not think we can get any legislation this session for land grants, or for changing line of road unless we pay more for it than it is worth.” “Scott is prepared to pay, or promises to pay, a large amount of money to pass his bill.” The Big Four poor-mouthed about their profits, complained of the risks of western railroading and the lack of investment money, and attacked any and all “government interference,” but each amassed a fortune of several tens of millions of dollars.

This dramatic union of economic and political power—symbolized by Stanford’s election as United States senator in 1885 by the state legislature—was not, however, typical of the nation’s political economy as a whole. The American polity was dotted by numerous power centers, but far from a master power system in government or in business, there was a chaotic dispersion of influence. Even the Big Four had a serious falling-out among themselves over politics, and even the sprawling railroad baronies could not stop passage of the Interstate Commerce Act. Big business was powerful; it was by no means all-powerful.

Certainly big business was not powerful enough to bar legislative action against the acceleration of financial and industrial combinations, even if it had had a mind to. Rooted in hundreds of years of English and American common law, the antitrust movement was propelled by powerful forces: the early American belief in competition fortified by Social Darwinism; protests by small businessmen, farmers, and workers against big mergers that threatened their livelihood; regional feeling in the South and West against big eastern “monopolists.” Liberal organs like the
New York Times
joined in the attack, as did an acute foreign observer.

“The power of groups of men organized by incorporation as joint-stock companies, or of small knots of rich men acting in combination,” wrote Lord Bryce in 1888, “has developed with unexpected strength in unexpected ways, overshadowing individuals and even communities, and showing that the very freedom of association which men sought to secure by law when they were threatened by the violence of potentates may, under the shelter of the law, ripen into a new form of tyranny.” The wave of mergers surged on. The upshot was the Sherman Antitrust Act, passed without opposition in the House and by a 52 to 1 vote in the Senate, and signed by President Harrison in July 1890. This unusual harmony was testimony less to universal enthusiasm over the measure than to wide acceptance of the need to slow combination. Big business hardly found the act very threatening. Instead of providing explicit legal prohibitions, the measure simply outlawed “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the
several states, or with foreign nations.” Instead of establishing an ICC type of commission charged with single-minded enforcement of the act, Congress left enforcement in the hands of federal prosecutors, private litigants seeking triple damages, and U.S. circuit courts. Competition itself, people hoped, would make the law virtually self-enforcing.